Empowering women’s SHGs through blockchain: a microfinance perspective

Purpose This paper aims to make microfinance transparent, effective and secure with the help of the decentralized nature of blockchain technology. In doing so, it guarantees that microfinance enhances greater financial inclusion along with the economic empowerment of women. The research conducted a pilot implementation of a blockchain-based microfinance platform with respect to some metrics: access to financial resources, average income per month, repayment of the loan, fraud incidents and financial literacy scores. The pilot results, primarily, are likely to suggest that improvement is statistically significantly different for all these metrics. Design/methodology/approach The research conducted a pilot implementation of a blockchain-based microfinance platform with respect to some metrics: access to financial resources, average income per month, repayment of the loan, fraud incidents and financial literacy scores. The pilot results, primarily, are likely to suggest that improvement is statistically significantly different for all these metrics. The percentage of SHG members that had access to financial resources doubled, with similar dynamics (increase of 197%) in the average monthly incomes of the actors being witnessed. Findings Blockchain’s transparent and immutable ledger system has addressed one of the key challenges in traditional microfinance – lack of trust. By ensuring that all transactions are securely recorded and easily verifiable, blockchain technology has built confidence among SHG members. This increased trust has encouraged greater participation in microfinance programmes, thereby expanding financial inclusion. The operational efficiency of the blockchain-based platform has significantly reduced the time required for transaction processing and loan disbursement. Traditional microfinance systems often involve lengthy processes with multiple intermediaries, leading to delays and higher operational costs. In contrast, the blockchain platform has streamlined these processes through automation and smart contracts, enabling real-time verification and execution of transactions. This efficiency not only improves the user experience but also reduces costs for microfinance institutions, making financial services more accessible and affordable. Moreover, the integration of AI-driven tools with the blockchain platform has enhanced financial literacy and inclusion. Personalized financial advice and educational resources provided by AI have empowered SHG members to better understand and manage their finances. Originality/value The pilot project in Rayagada has revealed the transformative potential of blockchain technology in the microfinance sector. By integrating the blockchain, the project has successfully enhanced transparency, operational efficiency and financial literacy among self-help group (SHG) members. These improvements have fostered a more inclusive and trustworthy financial environment, which is critical for the empowerment of marginalized communities.